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Lesson Learned!

Volume 4, 2016

By Charmaine N Clarke

Zoe Yang looks Chinese on the outside but she does business like a waiguouren (foreigner). The result: one failed entrepreneurial experience and a determination to understand the China market so she can try again.

She has a decade of experience in the European market and is convinced that once she adds China knowledge and experience to that, she will be unstoppable in her goal of running a viable business that also gives her an opportunity to help those in need.

Disastrous beginning

Zoe has always wanted to help others. That’s why she chose to study engineering at Sweden’s Royal Institute of Technology (KTH). “I had faith that technology would make the world a better place to live in,” she says from a sunlight-filled, windy balcony at CEIBS’ Shanghai Campus one summer afternoon during a break between her MBA classes.

But she soon learned that technology wasn’t enough.

After graduating from KTH in 2007, Zoe started her career at Ericsson headquarters, which gave her lots of opportunities for doing CSR-related work in developing countries. As a member of Ericsson’s volunteer team, she drove home the lesson that people need a solid educational background to be able to get the most out of all the high-tech resources available. “I saw the huge gap between the education levels of developing and developed countries and realised that technology alone is not enough,” she says. She decided to bridge the gap by helping bright students who lacked the resources to access high-quality overseas education. “My original goal was to help tech-savvy youngsters access a first-class education, especially those who didn’t have the resources to do this by themselves,” she says. She used all her long summer breaks in Europe to research the market, participate in education forums and search for business partners in China. At the end of 2014, when she had all the pieces in place, she quit her well-paying job at Ericsson and threw herself into social entrepreneurship.

It was a disaster.

“I had been in Sweden for 10 years. I had never worked in China before; I never got to know the market and build a network here,” she explains. “So maybe my way of communicating, and the way I think doesn’t really fit into today’s reality of the Chinese business environment.” Used to Swedish work ethics and labour laws, she floundered when faced with China’s job hopping workforce. And she had to learn that a contract in China is merely the start of a partnership in which she has to repeatedly negotiate new terms as they are raised by the other side.

“My naiveté was always being brought up by my business partners and other co-workers. In the beginning it was kind of cute, but then later they thought, ‘ok this is beyond being naïve, this is stupid’. I was in a totally different business environment!” she says.

Eventually, a major disagreement led to Zoe leaving the company she co-founded. Her initial goal had been to create a C2C platform that made it inexpensive to study abroad. She had a clear idea of her target market: those who were most in need. But seeing the profitability of similar market segments, her partners took the business in another direction so they could explore the coming boom in the high school education market. “Most students who can afford to go to high school abroad don’t really need our help. They can get this kind of service by paying other agencies in the market,” Zoe says as she explains her objection to the change in strategy. But her partners thought it best to expand their client pool and grow the company before helping those in need. The small company didn’t have the resources to pursue both ideas simultaneously. They had to choose. Zoe was outvoted in a decision on the company’s future direction.

Humbled by failure

The experience has humbled her. She realises that she may be Chinese by birth but she has a lot to learn about doing business in China. “My biggest regret isn’t choosing the wrong partner, it’s that I did things in the wrong order,” she says wistfully. “I should have first learned to understand the market here in China before I jumped into it to do business.” She adds, “Since I grew up in China and speak the language, people here treat me as a local and expect me to behave as a local. So they were confused by the way I behave. They either think I’m stupid or deliberately trying to sabotage them.”

Now she’s hoping that her CEIBS MBA will give her the skills she needs to make a success of her next entrepreneurial venture. She still wants to do something in the field of education, and it will still have a strong CSR focus and hopefully draw on her engineering skills. “I spent 10 years understanding how business works in Europe. With help from CEIBS, five years should be enough to understand how to successfully run a business in China,” she says.